Is Facebook Losing Face?

When Facebook made its debut on the NASDAQ as a public company, May 18, 2012, it was valued at $100 billion. Nearly four weeks and a few stumbling blocks later, the company is valued at $74 billion and has left some users feeling disenchanted and maybe even a little disillusioned. From May 31 to Jun….

When Facebook made its debut on the NASDAQ as a public company, May 18, 2012, it was valued at $100 billion. Nearly four weeks and a few stumbling blocks later, the company is valued at $74 billion and has left some users feeling disenchanted and maybe even a little disillusioned.

From May 31 to Jun. 4, 2012, Reuters and Ipsos Public Affairs surveyed 1,032 U.S. citizens about their Facebook usage. Although Facebook currently boasts approximately 900 million subscribers, 21% of those who responded to the Reuters-Ipsos survey said they didn’t have Facebook accounts.

Facebook’s valuation dropped from $100 billion to $74 billion after it encountered a few obstacles during its IPO. As a result, 44% of survey respondents said that they thought less favorably of Facebook. Besides losing favor, the company is also losing advertising dollars. Facebook ads don’t perform as well for some as they do for others. So, some companies have decided to discontinue their Facebook ad campaigns.

Perhaps one reason why Facebook ads don’t have much effect on people is because they aren’t always relevant to the targeted individual. For example, if a heterosexual male has a homosexual male friend or relative, the heterosexual male will start to receive ads that target homosexuals. How often does that sort of assumption pay off?

On the other hand, brands such as Starbucks, Target and Nutella fare quite well with their Facebook ad campaigns. So, maybe the problem stems from the fact that, at least in the U.S., people aren’t visiting Facebook often enough. For example, 34% of respondents said that they use Facebook less than they used to because the found the site “boring,” “not relevant,” or “not useful.” It’s hard to advertise to people who aren’t there.

People in the 18 to 34 demographic, naturally, make up the largest percentage of users, and 60% of them said that they use Facebook daily. Only 29% of those aged 55 and older said that they use the site on a daily basis.

Mobility may play the largest part in Facebook’s ad struggles, according to pundits. As yet, the company doesn’t have as much advertising for the mobile version.

Facebook has hit a bit of a snag with its ad offering, which competes heavily with Google, but the company is far from struggling.

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